4 ms·

Thanks very much for the answer. I assumed that it would have to go through the judiciary, but I am surprised to see it's not the case. It does make sense, esp

Thanks very much for the answer. I assumed that it would have to go through the judiciary, but I am surprised to see it's not the case. It does make sense, especially if it's not abusive (e.g. one month behind equals reposession)

adventured 5y ago
The other big thing at play here, is that car lenders get about 1/3 of the expected loan value if they repo the vehicle. Most of them don't want to do it unless they have to, it's usually far more profitable if the consumer continues making payments. The court typically only gets involved if the lender has reason to believe you might do something malicious and can convince the court to execute an immediate right to seize the vehicle (quickly after default). A court can also order a person to return the vehicle, if they've managed to successfully evade the repossession action by hiding it. This is a good thing so long as it's reasonably balance (ie the consumer doesn't get their vehicle repo'd on day one of being late), so our court system isn't filled up with car loans.
HeyLaughingBoy 5y ago
It doesn't go through the judiciary (e.g., it would if it were an an apartment and you stopped paying rent), but the owner signs a loan note that specifies that the loan is in default after missing N payments (usually after 3 months). Once in default, the bank can repossess the vehicle, but they'd rather not since their business is lending money and anything else is a money-losing distraction. So they will usually try to find a way for you to keep the car (and keep making payments). They usually only repo if they can't contact the debtor or they can't come to an agreement. Repossession of any kind (car, house, etc...) is typically an option of last resort for the bank after the debtor refuses to work with them or enter into other agreements that could help. They really just want to keep collecting payments from you.

adventured 5y ago

The other big thing at play here, is that car lenders get about 1/3 of the expected loan value if they repo the vehicle. Most of them don't want to do it unless they have to, it's usually far more profitable if the consumer continues making payments. The court typically only gets involved if the lender has reason to believe you might do something malicious and can convince the court to execute an immediate right to seize the vehicle (quickly after default). A court can also order a person to return the vehicle, if they've managed to successfully evade the repossession action by hiding it. This is a good thing so long as it's reasonably balance (ie the consumer doesn't get their vehicle repo'd on day one of being late), so our court system isn't filled up with car loans.

HeyLaughingBoy 5y ago

It doesn't go through the judiciary (e.g., it would if it were an an apartment and you stopped paying rent), but the owner signs a loan note that specifies that the loan is in default after missing N payments (usually after 3 months). Once in default, the bank can repossess the vehicle, but they'd rather not since their business is lending money and anything else is a money-losing distraction. So they will usually try to find a way for you to keep the car (and keep making payments). They usually only repo if they can't contact the debtor or they can't come to an agreement. Repossession of any kind (car, house, etc...) is typically an option of last resort for the bank after the debtor refuses to work with them or enter into other agreements that could help. They really just want to keep collecting payments from you.